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Albemarle (ALB) Q4 Earnings & Sales Miss, View Disappoints

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Albemarle Corporation (ALB - Free Report) recorded a profit of $90.4 million or 85 cents per share in the fourth quarter of 2019, down around 30% from $129.6 million or $1.21 per share it earned year ago.

Adjusted earnings for the reported quarter were $1.73 per share, up roughly 13% year over year. It lagged the Zacks Consensus Estimate of $1.75.

Revenues rose around 8% year over year to $992.6 million in the quarter. It, however, missed the Zacks Consensus Estimate of $1,001 million. Revenues were aided by higher volumes in the Lithium unit and favorable pricing in Bromine Specialties and Catalysts segments.
 

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise

Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote

 

Segment Highlights

Sales from the Lithium unit climbed around 20% year over year to $411.1 million in the reported quarter, aided by favorable sales volumes. Pricing was flat in the quarter. Adjusted EBITDA was down roughly 3% year over year to $140.1 million.

The Bromine Specialties segment recorded sales of $243.5 million, up around 2% year over year, supported by favorable pricing and product mix. Adjusted EBITDA was $79.7 million, up around 14% year over year.

The Catalysts unit recorded revenues of $282.5 million in the reported quarter, down roughly 7% year over year. Adjusted EBITDA was $76.7 million, down roughly 3% year over year. The company saw lower sales in Clean Fuel Technology as well as Fluid Catalytic Cracking (“FCC”) due to delays in the start-up of new FCC units.

Full-Year Results

Earnings for 2019 were $5.02 per share, down from $6.34 per share a year ago.

Revenues were $3.6 billion for the full year, up around 6% year over year.

Financial Position

Albemarle ended 2019 with cash and cash equivalents of roughly $613.1 million, up roughly 10% year over year. Long-term debt doubled year over year to around $2,862.9 million.

Cash flow from operations was $719.4 million for 2019, up around 32% year over year. Capital expenditures were $851.8 million for the year, up 22% year over year.

Outlook

Albemarle envisions its results in 2020 to be lower on a year-over-year basis factoring in lower expected results from the Lithium segment and flat-to-modestly lower results from the Bromine Specialties unit, partly offset by flat-to-slightly higher results from the Catalysts division.

The company expects net sales for 2020 to be between $3.48 billion and $3.53 billion, representing 2-3% year over year decline. Moreover, Albemarle sees adjusted earnings for 2020 in the band of $4.80-$5.10 per share, a year-over-year drop of 16-21%.

Adjusted EBITDA for the year has been forecast in the range of $880-$930 million, representing 10-15% year over year decline.

The company also expects its cost-reduction program to deliver run-rate savings of more than $100 million by the end of 2021.

Price Performance

Albemarle’s shares are up 7.8% over a year compared with the roughly 29.6% decline recorded by its industry.



 

 

Zacks Rank & Key Picks

Albemarle currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space include Daqo New Energy Corp. (DQ - Free Report) , NovaGold Resources Inc. (NG - Free Report) and Sandstorm Gold Ltd. (SAND - Free Report) .

Daqo New Energy has projected earnings growth rate of 353.7% for 2020 and sports a Zacks Rank #1 (Strong Buy). The company’s shares have surged roughly 131% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.

NovaGold has projected earnings growth rate of 11.1% for the current fiscal and carries a Zacks Rank #2 (Buy). The company’s shares have surged around 148% over a year.

Sandstorm Gold has estimated earnings growth rate of 66.7% for 2020 and carries a Zacks Rank #2. The company’s shares have shot up roughly 28% in a year’s time.

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